The value of Blackley leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate significantly once the unexpired lease term is less than 80 years
It is generally accepted that a property with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
The lawyers that we work with handle Blackley lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
In recent months Evan, started to get near to the eighty-year mark with the lease on his basement apartment in Blackley. In buying his property two decades ago, the length of the lease was of minimal relevance. by good luck, he recognised he would soon be paying way over the odds for a lease extension. Evan extended the lease at the eleventh hour last July. Evan and the landlord subsequently agreed on sum of £5,500 . If he had missed the deadline, the figure would have become more costly by a minimum £1,075.
In 2013 we were e-mailed by Dr K Cox who, having purchased a purpose-built apartment in Blackley in September 2001. The question was if we could approximate the price would be to extend the lease by a further 90 years. Comparative residencies in Blackley with an extended lease were valued about £200,800. The average amount of ground rent was £65 collected per annum. The lease came to a finish on 28 January 2086. Given that there were 60 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £20,900 and £24,200 exclusive of legals.
Mrs N Davies was assigned a lease of a ground floor apartment in Blackley in May 2008. The dilemma was if we could approximate the price could be to prolong the lease by a further 90 years. Identical residencies in Blackley with a long lease were in the region of £260,000. The mid-range ground rent payable was £50 collected monthly. The lease terminated on 22 June 2097. Having 71 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of costs.